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Mortgage Market and OCR Update The upcoming Official Cash Rate (OCR) review, scheduled for February 19, 2025, is anticipated to result in a 0.5% reduction, bringing the OCR down to 3.75% from its current 4.25%. interest.co.nz 💥Current Market Overview The New Zealand housing market has experienced significant fluctuations in recent years. After a peak in November 2021, house prices underwent a decline, followed by a stabilization phase. Recent data indicates a resurgence, with prices expected to increase by approximately 6% over the next year, driven by anticipated interest rate cuts. reuters.com Mortgage lending has also seen a notable uptick. As of late January 2025, there has been a strong rise in mortgage lending activities, reflecting growing confidence among borrowers and investors. mnimarkets.com 💥Anticipated OCR Reduction The RBNZ has been on a path of monetary easing, with a 0.5% cut in November 2024, setting the OCR at 4.25%. The upcoming February review is widely expected to implement another 0.5% reduction, aligning with the RBNZ's strategy to move the OCR toward a neutral level, estimated between 2.5% and 3.5%. reuters.com 💥Economic Considerations The RBNZ's decision to lower the OCR is influenced by several factors, including subdued inflation rates and a contracting economy. In the third quarter of 2024, the economy entered a recession, prompting the central bank to adopt a more accommodative monetary policy stance. reuters.com While the OCR cuts aim to stimulate economic activity, potential challenges such as rising unemployment and global economic uncertainties could impact the housing market's trajectory. It's essential for borrowers to remain cognizant of these factors when making long-term financial decisions. 💥Strategic Recommendations for Borrowers Given the anticipated OCR reduction, borrowers should consider the following strategies: 1- Assess Fixed vs. Floating Rates: Evaluate the benefits of fixed versus floating mortgage rates. While floating rates may decrease in response to the OCR cut, fixed rates offer stability against potential future rate fluctuations. 2-Refinancing Opportunities: Explore refinancing existing mortgages to take advantage of lower rates, which could result in significant savings over the loan term. 3- Stay Informed: Keep abreast of RBNZ announcements and economic indicators to make informed decisions. Regular consultations with financial advisors can provide personalized insights tailored to individual circumstances. In conclusion, the anticipated 0.5% reduction in the OCR reflects the RBNZ's commitment to supporting economic growth and maintaining price stability. For mortgage borrowers in New Zealand, this presents an opportune moment to reassess financial strategies and capitalize on the evolving market conditions. How Ascend Financial Services can help 👇👇 Instead of you having to regularly follow news and learn an industry, simply give Ascend Financial a call who have done all the work for you. We are always up to date with news, what banks are doing, what their policies are and how to best position you with debt management/structure. We cover all areas of lending including you home lending, business lending, asset finance. Anytime you require money, we can help. Reviews: 👌 Teri Tisdall Id like to recommend Ben at Ascend financial services. He made everything so stress free, he was super fast, and arranged a deal way more than I thought he would achieve. Interest rate is really good, and he had everything sorted. Should be more people like him about, as he cares, and also experienced beyond words in assisting with our needs. Thanks Ben. Brian D Ben was absolutely fantastic for us, very easy to deal with, understood our situation and came up with suitable options. He came highly recommended and didn't disappoint !!! 021 217 8208 Ben@ascendfinancial.co.nz www.ascendfinancial.co.nz #mortgage #propertyfinance #assetfinance #personalfinance